LABOR LAW

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1997 BAR EXAMINATIONS

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Question No. 1:

Differentiate labor standards law from labor relations law. Are the two mutually exclusive?

ANSWER:

Labor standards law is that labor law which prescribes terms and conditions of employment like Book III,
Book IV, Title I and Book VI of the Labor Code. These Books of the Labor Code deal with working conditions,
wages, working conditions for women, minors, househelpers and home-workers, medical and dental services,
occupational health and safety, termination and retirement.

On the other hand, labor relations law is that labor law which regulates the relations between employers
and workers like Book V of the Labor Code which deals with labor organizations, collective bargaing, unfair labor
practices and strikes and lockouts.

Labor standards laws and labor relations laws are not mutually exclusive; they are complement to each
other. Thus, the law on strikes and lockouts which is an example of labor relations law includes some provisions on
the security of tenure of workers who go on strike or who are locked out. These provisions are examples of labor
standards law.

Question No. 2:

Danilo Flores applied for the positions of driver in the motorpool of Gold Company, a multinational corporation.
Danilo was informed that he would frequently be working overtime as he would have to drive for the company’s
executives even beyond the ordinary eight-hour work day. He was provided with a contract of employment wherein he
would be paid a monthly rate equivalent to 35 times his daily wage, regular sick and vacation leaves, 5-day leave with pay
every month and time off with pay when the company’s executives using the cars do not need Danilo’s service for more
than eight hours a day, in lieu of overtime.

Are the above provisions of the contract of employment in conformity with, or violative of, the law?

ANSWER:

Except for the provision that Danilo shall have time off with pay when the company’s executives using the
cars do not need Danilo’s service for more than eight hours a day, in lieu of overtime, the provisions of the contract
of employment of Danilo are not vilative of any labor law because they instead improve upon the present
provisions of pertinent labor laws.

Thus, the monthly rate equivalent to 35 times the daily wage may be sufficient to include overtime pay.
There is no labor law requiring the payment of sick and vacation leaves except the provision for a five-day
service incentive leave in the Labor Code.

The 5-day-leave with pay every month has no counterpart in Labor Law and is very generous.

As for the provision in Danilo’s contract of employment that he shall receive time off with pay in lieu of
overtime, this violates the provision of the Labor Code which states that undertime work on any particular day
shall not be offset by overtime work on any other day. Permission given to the employer to go on leave on some
other day of the week shall not exempt the employer from paying the additional compensation required by the
Labor Code.

Question No. 3:

Robert Suarez is a salesman for Star Pharmaceuticals. Star Pharmaceuticals has applied with the Department of
Labor and Employment for clearance to terminate (by way of retrenchment) the services of Suarez due to financial losses.
Robert Suarez, aside from his monthly salary, receives commissions on the sales he makes. He also receives allowances.
The existing CBA between Star Pharmaceuticals and the union, of which Robert Suarez is a member, states that any
employee separated from employment for causes not due to the fault of the employee shall receive from the company a
retirement gratuity in an amount equivalent to one month’s salary per year of service.
 Robert Suarez contends that in computing his separation pay, his sales commission and his allowances should be
included in the monthly salary. Do you agree?

ANSWER:

I agree, with some conditions.

In computing separation pay, the monthly salary should include commissions because commissions
received by a salesman is part of his salary.

But for allowances to be included as a part of salary, they should be for services rendered or to be rendered
like a cost of living allowance. But transportation and representation allowances are not considered as part of
salary because they are to meet expenses for transportation and representation. Thus, cost of living allowances, but
not transportation or representations allowances, shall be included as part of salary in the computation of
separation pay.

Note:
Re: allowances as part of salary, in Santos vs. NLRC, 154 SCRA 166, the Supreme Court said: “in the
computation of backwages and separation pay, account must be taken not only of basic salary but also her
transportation and emergency living allowances.”

Question No. 4:

Ruben Padilla entered into a written agreement with Gomburza College to work for the latter in exchange for the
privilege of studying in said institution. Ruben’s work was confined to keeping clean the lavatory facilities of the school.
One schoolday, Ruben got into a fistfight with a classmate. Victor Monteverde, as a result of which the latter sustained a
fractured arm.

Victor Monteverde filed a civil case for damages against Ruben Padilla, impleading Gomburza College due to the
latter’s alleged liability as an employer of Ruben Padilla.

Under the circumstances, could Gomburza College be held liable by Victor Monteverde as an employer of Ruben
Padilla?

ANSWER:

Gomburza College is not liable for the acts of Ruben Padilla because there is no employer-employee
relationship between them. As provided in the Rules and Regulation implementing the Labor Code “there is no
employer-employee relationship between students on one hand, and schools, colleges, or universities on the other,
where students work with the latter in exchange for the privilege to study free of charge, provided the students are
given real opportunity, including such facilities as may be reasonable and necessary to finish their chosen course
under such arrangement.”

ALTERNATIVE ANSWER:

Gomburza College can be held liable by Victor Monteverde as an employer of Ruben Padilla.

Applying the control test, the College is the employer of Padilla because in the latter’s work of keeping
clean the lavatory facilities of the school, he is under the control of the College as regards hi employment.

However, Ruben Padilla was not acting within his assigned tasks. Art 2180, New Civil Code provides: “The
obligation imposed by Art. 2178 (Quasi-delicts) is demandable xxx (also from) employers (who) shall be liable for
the damages caused by their employees xxx acting within the scope of their assigned tasks, even though the former
are not engaged in any business or industry.” It could be argued that Ruben Padilla was not acting within the
scope of his assigned tasks; thus, his employer, Gomburza College is not liable.

Question No. 5:

(a) Describe a “closed shop agreement”. Does it differ deom an “agency shop agreement”?
(b) Are the above agreements legal?

ANSWER:

(a) A “closed shop agreement” is that agreement embodied in a collective bargaining agreement (CBA)
whereby the employer binds itself not to hire any person unless he is first a union member of the
collective bargaining representative. An “agency shop agreement” is different from a closed shop
agreement in that under former, the employer does not bind itself not to hire a person unless he is a
first union member of the collective bargaining representative. Instead, the employer binds itself to
 check off from those who are not union members of the collective bargaining representative a
reasonable fee equivalent to the dues and other fees paid by union members if the non-union members
accept the benefits of the CBA.
(b) The above agreements are legal or they are expressly allowed by the Labor Code.

Question no. 6:

The Kilusang Kabisig, a newly-formed labor union claiming to represent a majority of the workers in the
Microchip Corporation, proceeded to present a list of demands to the management for purposes of collective bargaining.
The Microchips Corporation, a multinational corporation engaged in the production of computer chips for export, declined
to talk with the union leaders, alleging that they had not as yet presented any proof of majority status.

The Kilusang Kabisig then charged Macro chip Corporation with unfair labor practice, and declared a “wildcat”
strike wherein means of ingress and egress were blocked and remote and isolated acts of destruction and violence were
committed.

(a) Was the strike legal?

(b) Was the company guilty of an unfair labor practice when it refused to negotiate with Kilusang Kabisig.

ANSWER:

(a) Because what was declared is a “wildcat” strike, the strike is illegal. A “wildcat” strike is one that is
declared by a group of workers without formal union approval. Thus, it is illegal because the Labor
Code requires that for a strike to be legal, among others, the decision to declare a strike must be
approved by a majority of the total union membership in the bargaining unit concerned, obtained by a
secret ballot in meetings or referenda called for that purpose.

ALTERNATIVE ANSWERS:

1) The strike is illegal. The Labor Code recognizes only one of two (2) grounds for a strike to be legal:
bargaining deadlock or unfair labor practice. A strike to compel an employer to recognize a union not
allowed by law.

2) The strike is not illegal. For the strike to be illegal because of violence, it should be characterized by
pervasive violence. Here, there were only remote and violated acts of destruction and violence. But even
if the strike is not illegal, those strikers who committed illegal acts, namely, those who blocked the
means of ingress and egress and who committed acts of destruction and violence, these strikers can be
legallt dismissed.

(b) No. It is not an unfair labor practice (ULP) not to bargain with a union which has not presented any
proof of its majority status. The Labor Code imposes on an employer the duty to bargain collectively
only with a legitimate labor organization designated or selected by the majority of the employees in an
appropriate collective bargaining unit. It is not a ULP for an employer to ask a union requesting to
bargain collectively that such union requesting to bargain collectively that such union first show proof
of its being a majority union.

Question No. 7:

On 01 August 1992, Pro-Knit, a corporation engaged in the manufacture of textile garments, entered into a
collective bargaining agreement with the Kamao Union in representation of the rank and file employees of the
corporation.

The CBA was effective up to 20 June 1995. The contract had an automatic renewal clause which would allow the
agreement after its expiry date to still apply until both parties would have been able to execute a new agreement.

On 10 May 1995 Kamao Union submitted to Pro-Knit’s management their proposals for the renegotiation of a
new CBA. The next day, Pro-Kniw had entered into a merger with Eagle Garments, a corporation also engaged in the
manufacture and textile garments. Eagle Garments assumed all the assets and liabilities of Pro-Knit.

Kamao filed a complaint with the Regional Trial Court for specific performance and damages with a prayer for
preliminary injunction against Pro-Knit and Eagle Garments.

Pro-Knit and Eagle Garments filed a Motion to Dismiss based on lack of jurisdiction. How would you rule on the
Motion to Dismiss?

ANSWER:
 I will grant the Motion to Dismiss. The act of Pro-knit suspending negotiations with Kamao Union could be
an unfair labor practice. It could be a violation of the duty to bargain collectively. As such, the case is under the
jurisdiction of a Labor Arbiter and not of a Regular Court.

ALTERNATIVE ANSWER:

I will deny the Union’s Motion to Dismiss. There is no labor dispute between the parties; hence, the
Regional Trial Court has jurisdiction over the complaint. Art. 212 of the Labor Code, reads –

Labor dispute includes any controversy or matter concerning terms or conditions of employment or the
association or representation of person in negotiating, fixing, maintaining, changing or arranging the terms and
conditions of employment regardless of whether the disputants stand in the proximate relations of employer and
employee.

In addition, the Company can claim that labor contracts are contracts in personam and do not generally
bind successors in interest except under special circumstances. In Sundowner Development Corporation v. Drilon,
180 SCRA 14, the Court said:

The rule is that unless expressly assumed, labor contracts such as xxx collective bargaining agreements are
not enforceable against a transferee of an enterprise, labor contracts being in personam, thus binding only between
the parties.

Question No. 8:

(a) Define Wage Distortion.

(b) May a wage distortion, alleged by the employees but rejected by the employer to be such, be a valid ground for
staging a strike?

ANSWER:

(a) A wage distortion is that brought about where an increase in the prescribed wage rates results in the
elimination or severe contraction of intentional quantitative differences in wage or salary rates between
and among employee groups in an establishment as to effectively obliterate the distinctions embodied in
such wage rates based on skills, length of service and other logical bases of differentiation.
(b) No, the existence of wage distortion is not a valid ground for a strike because Art. 124 of the Labor Code
provides for a specific method of procedure for correcting wage distortion. In Ilaw at Buklod ng
Manggagawa vs. NLRC, 198 SCRA 586, the Court said: -

It goes without saying that these joint or coordinated activities may be forbidden or restricted by law or
contract. For the particular instance of “distortions of the wage structure within an establishment”
resulting from the application of any prescribed wage increase by virtue of a law or wage order, Section 3
of Republic Act No. 6727 prescribes a specific, detailed and comprehensive procedure for the correction
thereof, thereby implicitly excluding strikes or lockouts or other concerted activities as modes of settlement
of the issue.

ALTERNATIVE ANSWER:

(b) A wage distortion, alleged by the employees but rejected by the employer can be a valid ground for staging
a strike if it happens that in rejecting the allegation of wage distortion, the employer refuses to consider the
issue under the grievance procedure provided for in the applicable CBA, and later on through Voluntary
Arbitration. These acts of the employer can be considered as a violation of its duty to bargain collectively
which is unfair labor practice (ULP). A ULP strike is legal.

Question No. 9:

Mr. Jonathan Pe, a registered stockholder of New Wave Beauty Shop, Inc. was elected Vice-President of New
Wage at a regular monthly meeting.

At a subsequent meeting of the Board of Directors, it was resolved to dismiss Jonathan as Vice-President due to
loss of trust and confidence, Jonathan Pe filed with the National Labor Relations Commission a complaint for illegal
dismissal with damages against New Wage claiming that he was dismissed without due process. New Wage filed a
Motion to Dismiss based on lack of jurisdiction.

Resolve the motion.

ANSWER:
 The Motion to Dismiss should be granted. The election of Jonathan Pe as Vice President of New Wave
Beauty Shop, Inc., made him a corporate officer.

His subsequent dismissal as such corporate officer is considered an intra-corporate matter. Thus, the
dismissal of Pe is not a case of a termination dispute which is under the jurisdiction of a Regional Branch of the
NLRC. Instead, it is under the jurisdiction of the Securities and Exchange Commission, it hhaving jurisdiction
over intra-corporate matters.

Question No. 10:

Are the principal officers of a corporation liable in their personal capacity for non-payment of unpaid wages and
other monetary benefits due to its employees?

ANSWER:

As a general rule, the obligations incurred by the principal officers and employees of a corporation are not
theirs but the direct accountabilities of the corporation they represent. However, solidary liabilities may at times
be incurred but only when exceptional circumstances warrant such as, generally, in the following cases: when
directors and trustees or, in appropriate cases, the officers of a corporation: (a) vote for or assent to patently
unlawful acts of the corporation; (b) act in bad faith or with gross negligence in directing the corporate affairs; (c)
are guilty of conflict of interest to the prejudice of the corporation, its stockholders or members, and other person.

In labor cases, the Supreme Court has held corporate directors and officers solidarily liable with the
corporation for the termination of employment of employees done with malice or bad faith. (Sunio v. NLRC, 127
SCRA 290; General Bank and Trust Co. v. Court of Appeals, 135 SCRA 659).

ALTERNATIVE ANSWER:

No. Unless they are guilty of malice or bad faith in connection with the non-payment of unpaid wages and
other monetary benefits due to employees.

Question No. 11:

Atty. Facundo Veloso was retained by Welga Labor Union to represent it in the collective bargaining
negotiations. It was agreed that Atty. Veloso would be paid in the sum of P20,000.00 as attorney’s fees for his assistance
in the CBA negotiations.

After the conclusion of the negotiations, Welga Labor Union collected from its individual members the sum of
P100.00 each to pay for Atty. Veloso’s fees and another sum of P100.00 each for services rendered by the union officers.
Several members of the Welga Labor Union approached you to seek advice on the following matter.

(a) Whether or not the collection of the amount assessed on the individual members to answer for the Attorney’s fees
was valid.
(b) Whether or not the assessment of P100.00 from the individual members of the Welga Labor Union for services
rendered by the union officers in the CBA negotiations was valid.

ANSWER:

(a) The assessment of P100.00 from each union member as attorney’s fees – for union negotiation, is not
valid. Art. 222(b) of the Labor Code, reads:

“No attorneys fees, negotiation fees or similar charges any kind arising from any collective agreement
shall be imposed on any individual member or the contracting union; Provided, however, that
attorneys fees may be charged against union funds in an amount to be agreed upon by the parties. Any
contract, agreement or arrangement of any sort to be contrary shall be null and void.”

(b) The assessment of P100.00 as negotiation fees charged to each individual union member and payable to
union officers is also not valid, for the same reason as stated above. The assessment is an act violative of
Art. 222(b).

ALTERNATIVE ANSWER:

(a) The collection of the amount assessed on the individual members to answer for attorney’s fees would be
valid if it was authorized by a written resolution of a majority of all the members in a general
membership meeting called for the purpose.
(b) The assessment of P100.00 from the individual members of the Welga Labor Union for services
rendered by the union officers in the CBA negotiations would be valid if it was authorized by a written
 resolution of a majority of all the members in a general membership meeting duly called for the
purpose. [Art. 241 (N)]

Question No. 12:

The general manager of Junk Food manufacturing Corporation dismissed Andrew Tan, a rank-and-file employee,
on the ground of insubordination. The general manager served on Andrew Tan the letter of termination effective upon
receipt which was on 08 March 1992. Shocked by his unexpected dismissal, Andrew Tan confronted the general manager
and hit the latter on the head with a leap pipe.

Junk Food Manufacturing filed a complaint in court against Andrew Tan for less serious physical injuries.
Somehow, Andrew Tan was acquitted by the court assigned to hear the criminal case. A few days following his acquittal,
or on 01 March 1996, Andrew Tan filed complaint against the company for illegal dismissal, reinstement and the payment
of backwages and damages.

(a) Was the complaint filed by Andrew Tan for illegal dismissal within the reglementary period granted by law?
(b) What reliefs may Andrew Tan be entitled to if the Labor Arbiter finds just cause for termination but that the
requirements of notice and hearing are not complied with?

ANSWER:

(a) Yes. The complaint was filed within four (4) years from the date Andrew Tan was dismissed by his
employer. Illegal dismissal, as a cause of action, namely illegal dismissal took plave. This is pursuant to the
Civil Code which provides that action upon an injury to the rights of a person should be initiated within
four years from the time the right of the action accrues. (Art. 1146 of the Civil Code)
(b) Andrew Tan would be entitled to an indemtnity of P1,000 to P10,000 from his employer for the latter’s
non-compliance of the requirements of notice and hearing in cases of termination of employment. (Wenphil
Philippines v. NLRC, 176 SCRA 66)

Question No. 13:

State the cases when a labor dispute would fall under the jurisdiction of voluntary arbitrators or panel of voluntary
arbitrators.

ANSWER:

A labor dispute falls under the jurisdiction of a voluntary arbitrator or a panel of voluntary arbitrator if a
labor disputes arises from an unresolved grievance which in turn arises from the interpretation or implantation of
a Collective Bargaining Agreement or of company personnel policies. (Art. 261)

Upon agreement of parties, a voluntary arbitrator or panel of voluntary arbitrators may also hear and
decide all other labor disputes including unfair labor practices and bargaining deadlock. (Art. 262)

Question No. 14:

The Secretary of Labor assumed jurisdiction over a strike in Manila Airlines and eventually issued a return-to-
work. The Manila Airlines Employees Union defied the return-to-work order and continued with their strike. The
management of Manila Airlines then declared all the employees who participated in the strike dismissed from
employment.

(a) Was the act of Manila Airlines’ management in dismissing the participants in the strike valid?
(b) What are the effects of an assumption of jurisdiction by the Secretary of Labor upon the striking employees
and Manila Airlines?

ANSWER:

(a) Yes. The act of Manila Airlines management in dismissing the participants in the strike is valid. In a
number of Supreme Court decisions, it has ruled that the defiance by workers of a return to work order of
the Secretary of Labor issued when he assumes jurisdiction over a labor dispute is an illegal act and could
be the basis of a legal dismissal. The return to work order imposes a duty; it must be discharged as a duty
even against the workers’ will.
(b) When the Secretary of Labor assumes jurisdiction over a strike, all striking employees shall immediately
resume operations and readmit all workers under the same terms and conditions prevailing before the
strike. [Art. 263(q)]

Question No. 15:

 A strike was staged in Mella Corporation because of a deadlock in CBA negotiations over certain economic
provisions. During the strike, Mella Corporation hired replacements for the workers who went on strike. Thereafter, the
strikers decided to resume their employment.

Can Mella Corporation be obliged to reinstate the returning workers to their previous positions?

ANSWER:

Yes. Mella Corporation can be obligated to reinstate the returning workers to their previous positions.
Workers who go on strike do not lose their employment status except when, while on strike, they knowingly
participated in the commission of illegal acts. The Labor Code expressly provides: Mere participation of a worker
in a lawful strike should not constitute sufficient ground for termination of his employment, even if a replacement
had been hired by the employer during such lawful strike.

Question No. 16:

Distinguish between “job contracting” and “labor-only contracting.”

ANSWER:

When a person, not being an employer, contracts with an independent contractor for the performance of
any work, task, job or project, there is “job contracting.” When the independent contractor does the work that is
contracted out, he is not under the control of the person who contracted out the work to be done.

In “labor-only contracting”, a person supplies workers to an employer. Said person does not have
substantial capital or investments in the form of tools, equipment, machineries, work premises, among others, and
the workers recruited and placed by such person are performing activities related to the principal business of the
employer to whom the workers are supplied.

Question No. 17:

Lita Cruz, a full time professor in San Idelfonso University, is paid on a regular monthly basis. Cruz teaches for a
period of ten months in a schoolyear, excluding the two month’s summer break.

During the semestral break, the University did not pay Lita Cruz her emergency Cost of Living allowance
(ECOLA) although she received her regular salary since the semestral break was allegedly not an integral part of the
school year and no teaching service were actually rendered by her. In short, the University invoked the principle of “no
work, no pay”.

Lita Cruz seeks your advice on whether or not she is entitled to receive her ECOLA during semestral breaks. How
would you respond to the query?

ANSWER:

There is no longer any law making it the legal obligation of an employer to grant an Emergency Cost of
Living Allowance (ECOLA). Effective 1981, the mandatory living allowances provided for in earlier Presidential
Decrees were integrated into the basic pay of all covered employees.

Thus, whether the ECOLA will be paid or not during the semestral break now depends on the provisions of
the applicable wage order or contract, which may be a CBA, that many grant said ECOLA.

ALTERNATIVE ANSWER:

The “no work, no pay” principle does not apply. The teachers receive their regular salaries during the
semestral break. The law granting emergency cost of living allowances was designed to augment the income of the
employees to enable them to cope with the rising cost of living and inflation. It was enacted pursuant to the State’s
duty to protect labor and to alleviate the plight of the workers. To uphold the school’s interpretation of the law
would run counter to the intent of the law and constitution (University of Pangasinan Faculty Union v. University
of Pangasinan, 127 SCRA 691).

Question No. 18:

Lito Kulangkulang and Bong Urongsulong are employed as truck drivers of Line Movers, Inc. Usually, Lito is
required by the personnel manager to just stay at the head office after office hours because he could be called to drive the
manager’s reception room. On the other hand, Bong was allowed to go home after office hours but is required to keep his
cellular phone on so that he could be contacted whenever his services as driver becomes necessary.

Would the hours that Lito and Bong are on call be considered compansable working hours?
ANSWER:

The hours of Lito and Bong while on call can be considered compensable hours. The applicable rule is: “An
employee who is required to remain on call in the employer’s premises or so close thereto that he cannot use the
time effectively and gainfully for his own purpose shall be considered as working while on call. An employee who is
not required to leave word at his home or with company officials where he may be reached is not working while on
call.” Here, Bong is required to stay at the office after office hours so he could be called to drive the trucks of the
Company. As for Bong, he is required to keep his cellular phone so that he could be contacted whenever his
services as driver as needed. Thus, the waiting time of Lito and Bong should be considered are compensable hours.

Note: It could be argued that in the case of Bong who is not required to stay in the office but is allowed to
go home, if he is not actually asked by cellular phone to report to the office to drive a car, he can use his time
effectively and gainfully to his own purpose, thus, the time that he is at home may mean that there are not
compensable hours.

Question No. 18:

Dinna Ignacio was hired by Stag Karaoke Club as a guest relations officer. Dinna was also required to sing and
dance with guests of the club.

In Dinna Ignacio’s employment contract, which she signed, the following stipulations appeared:

Compensation : Tips and commissions coming from guests shall be subjected to 15% deduction.
Hours of work : 5 P.M. up to 2 A.M. daily including Sundays and Holidays
Other conditions : Must maintain a body weight of 95 lbs., remain single. Marriage or pregnancy will be
considered as valid ground for a termination of employment.

A year later, Dinna Ignacio requested to go on leave because she would be getting married to one of the club’s
regular guests. The management club dismissed her.

Dinna filed a complaint for illegal dismissal, night shift differential pay, backwages, overtime pay and holiday
pay. Discuss the merits of Dinna’s complaint.

ANSWER:

The first issue to be resolved is: Is Dinna Ignacio an employee of the Star Karaoke Club? Yes, she is an
employee per the provision of the Labor Code that states: “Any woman who is permitted or suffered to work, with
or without compensation, in any night club, cocktail lounge, massage clinic, bar or similar establishment, under the
effective control or supervision of the employer for a substantial period shall be considered an employee of such
establishment for purposes of labor and social legislation”(Art. 138). In Dinna’s conditions of employment have all
the aforesaid characteristics.

She has been illegally dismissed. The Labor Code expressly provides, that “It shall be unlawful for an
employer to require as a condition of an employment or continuation of employment that a woman employee shall
not get married, or to stipulate expressly or tacitly that upon getting married a woman employee shall be deemed
resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee
merely by reason of her marriage.” (Art. 136)

Because of her illegal dismissal, she is entitled to backwages from the time her compensation was withheld
from her to the time of her actual reinstatement.

Dinna is not entitled to night differential pay, overtime pay and holiday pay because she belongs to one of
those classes of employees who are not covered by the provision of the Labor Code providing for these benefits.
She is a worker paid by results, since her compensation is determined by the tips and commission that she receives
from her guests.

Question No. 20:

State the respective coverages of (a) the Social Security Law; (b) the Revised government Service Insurance Act
and (c) the Employees Compensation Act.

ANSWER:

(a) Coverage of SSS (Sec. 9, RA 8282) shall be compulsory upon all employees not over sixty years of age and
their employers.
 Filipinos recruited in the Philippines by foreign-based employers for employment abroad may be covered
by the SSS on a voluntary basis.

Coverage in the SSS shall also be compulsory upon all self-employed persons earning P1,800 or more per
annum.

(b) Membership in the government Service Insurance System (Art. 3, RA 8291) shall be compulsory for all
permanent employees below 60 years of age upon appointment to permanent status, and for all elective
officials for the duration of their tenure.

Any person, whether elected or appointed, in the service of an employer is a covered employee if he
receives compensation for such service.

(c) Coverage in the State Insurance Fund (Art. 168, Labor Code) shall be compulsory upon all employers and
their employees not over sixty (60) years of age; Provided, that an employee who is over (60) years of age
and paying contributions to qualify for the retirement or life insurance benefit administered by the System
shall be subject to compulsory coverage.

The Employees Compensation Commission shall ensure adequate coverage of Filipino employees employed
abroad, subject to regulations as it may prescribe. (Art. 170)

Any person compulsorily covered by the GSIS including the members of the Armed Forces of the
Philippines, and any person employed as casual, emergency, temporary, substitute or contractual, or any
person compulsorily covered by the SSS are covered by the Employees Compensation Program.